The 2027 Social Security Administration cost-of-living adjustment is set at 3.6% and will take effect with the January 2027 payments, providing an average monthly increase of roughly $75 to retirement checks. This 2027 COLA adjustment also applies to military retirees, disabled veterans, and Civil Service Retirement System (CSRS) annuitants. Overall, the 2027 Social Security COLA marks the largest raise since 2023. However, because the Federal Employees Retirement System (FERS) COLA 2027 rate is limited to 2.6%, many federal retirees will receive a smaller bump.
Also Read: US Debt Crisis May Already Be Underway, Expert Warns
Social Security Administration COLA Increase: Why FERS Gets Less
The SSA announced this figure on Wednesday, October 14, immediately following the Bureau of Labor Statistics’ release of the September data for the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This Social Security Administration COLA increase impacts approximately 76 million Americans.
Commissioner Frank Bisignano stated:
“Social Security will implement this cost-of-living adjustment for 76 million Americans, giving them greater financial stability.”
Retirees tracking the 2027 Social Security COLA forecasts received a slightly higher figure than anticipated, as the 3.6% increase outpaces the 2.8% awarded in 2026 and exceeds the 3.5% projection from The Senior Citizens League. Alongside this adjustment, the SSA also raised the maximum amount of earnings subject to the Social Security tax from $184,500 to $192,300.
How The SSA Calculates The 3.6% Raise
By law, the SSA determines each Social Security Administration COLA increase by comparing the average CPI-W from July, August, and September with the same three-month period from the previous year. If prices go up, benefits increase; if they do not, benefit checks remain flat and never decrease. The 2027 COLA increase also exceeds the roughly 3.1% average seen over the past decade.
Why FERS Retirees Only Get 2.6%
While CSRS annuitants receive the full 3.6% adjustment for 2027, FERS annuities use a reduced formula:
- COLA above 3%: FERS retirees get 1 percentage point less
- COLA between 2% and 3%: FERS retirees get 2%
- COLA below 2%: FERS retirees get the full COLA
According to Government Executive, this formula sets the FERS COLA 2027 rate at 2.6%, and it applies exclusively to the basic annuity rather than the annuity supplement. Consequently, the general Social Security COLA increase and the FERS adjustment differ by a full percentage point this year.
NARFE National President William Shackelford remarked:
“FERS retirees will have their COLAs reduced by an entire percentage point, reducing the real value of their annuities. Inflation impacts these FERS retirees the same way as all other retirees, yet they are forced to accept a diet COLA.”
Advocates point out that this discrepancy can accumulate into thousands of dollars over the course of a long retirement. A legislative remedy exists on paper in the form of the Equal COLA Act, a House bill introduced in January 2025 that would grant FERS annuitants the full adjustment. Although it has gathered 90 cosponsors as of this writing, the bill has not advanced, leaving the FERS COLA 2027 rate at 2.6% for now.
Shackelford added:
“The Equal COLA Act would remedy this inequity. FERS retirees deserve full protection to maintain the purchasing power of their annuity throughout retirement.”
What Military Retirees And Veterans Get
Military retirement pay will increase in alignment with the broader Social Security Administration COLA increase, translating to an extra $36 per month for every $1,000 of monthly pension. Similarly, VA disability checks will grow by approximately $6.50 a month for a 10% rating and about $147.08 for a 100% rating without dependents.
The Social Security Administration COLA increase will be reflected in January payments. Beneficiaries can view their 2027 Social Security COLA notices online starting in late November, or receive them via postal mail in December if they have not opted for paperless notifications. For federal retirees, these COLA differences will appear in that same January distribution, with FERS annuitants receiving one percentage point less.